Overview of Partnership Firm Registration
There are circumstances where it would not be possible for an entrepreneur alone to arrange for the requisite capital and resources. Further, the nature of business is such that it requires increased supervision and control, division of work, and sharing of risks. This is when a partnership form of business can be undertaken by the entrepreneur.
A partnership is a legally binding agreement between two or more persons to manage and operate a business and share profits. General partnerships, limited partnerships, and limited liability partnerships are the types of partnerships recognized under the Companies and Allied Matters Act (CAMA) 2020.
One of the advantages of a partnership business in Nigeria is that it allows for the sharing of resources, expertise, and capital between partners, which can help to grow the business more quickly. Partnerships are also relatively easy and inexpensive to set up and manage, compared to other types of business structures.
SplashDict is equipped with accredited experts and the necessary resources to assist you to complete the Registration of a Partnership Business in Nigeria.
Benefits of Registering a Partnership Business
Partnership firms have several advantages, including:
Registering a Partnership Firm with the Corporate Affairs Commission (CAC) provides the organization with legal status, making it easier to enter into contracts, own property, and carry out other legal activities.
Easy to start
Partnership firms are relatively easy and inexpensive to start compared to other business structures, such as corporations. They require minimal legal formalities and can be started with a Partnership Deed.
Shared risk and responsibility
The risk and responsibility of the business are shared among the partners. This can be advantageous because partners can leverage each other's strengths and skills to manage the business.
Access to more capital
With more partners, a partnership firm has access to more capital than a sole proprietorship. Each partner can contribute to the capital of the business, making it easier to raise funds for expansion or other purposes.
Partnership firms have more flexibility than corporations in terms of management and decision-making. Partners can make decisions quickly and efficiently without the need for board meetings or shareholder approval.
Easy to dissolve
If a partner wants to leave the business, or the partnership firm wants to dissolve, it can be done relatively easily compared to other business structures.
Existence of an Agency Relation
All partners or any one partner acting on behalf of others can undertake partnership business. This means each partner is a principal in himself who can act in his own right. Further, he can also act on behalf of other partners by acting as their agent.
Duration of the Partnership Firm
The partnership Firm may continue as long as the partners wish to do so. However, as per law, the partnership can come to an end if any of the partners dies, retires, or becomes insolvent. But, the remaining partners can continue doing business under the same name after sorting out the due share of the outgoing partner.
It is because of the ownership, administration, and profit in the partnership firm that the business can be well managed.
Protection of partnership name
Registering your partnership name with the CAC protects it from being used by another business.
Open a Business Bank account
You need to provide proof that your Firm is registered with the Corporate Affairs Commission to open a corporate bank account.
Access to funding
Registered partnerships are eligible to apply for loans and other funding opportunities that are not available to unregistered businesses.
Choosing a Type of Partnership Business
The choice of the preferred form of partnership largely depends on the purpose for which the partnership is constituted, nature of the relationship that exists between the proposed partners, and the extent to which each partner may want to bear liability for the business.
A general partnership is a business arrangement in which two or more people agree to share all of a company's assets, profits, and financial and legal liabilities. Partners in a general partnership consent to bear unlimited liability, which means they can be sued for business obligations.
Each partner has a right to participate in the management of the company, and each partner must disclose their portion of the company's revenues and losses on their personal tax return.
The corporate entity is not separate from the partners in general partnerships, and the partners are responsible for each other's conduct. The personal assets of the partners are unprotected, and the partnership may be terminated if one of the partners dies or withdraws from the partnership.
A limited partnership (LP) is a type of partnership with at least one general and one limited partner. A general partner's liabilities are unlimited meaning the general partner bears personal liability to the partnership, whereas a limited partner's liabilities are limited unless he participates in the partnership's management.
A limited partnership cannot have more than 20 partners and may have a corporate entity as a partner. The general partner is in charge of the day-to-day operations of the company. The other partners normally contribute capital in exchange for a share of the earnings and do not participate in the partnership's management.
LPs are not taxed as separate entities, but their partners are taxed on their personal income. Real estate investors, hedge funds, investment partnerships, and other businesses commonly employ this company structure.
A Limited Liability Partnership (LLP) is a type of business entity in Nigeria that combines the flexibility of a partnership with the limited liability protection of a corporation.
LLPs in Nigeria must have at least two partners, and there is no limit to the maximum number of partners. The partners can be individuals or corporations, and each partner is only liable for the debts and obligations of the partnership to the extent of their capital contribution.
One of the main advantages of an LLP in Nigeria is that it offers limited liability protection to its partners, which means that their personal assets are protected in the event of business failure. LLPs also offer flexibility in terms of management and decision-making, and partners can share profits and losses in a way that suits their needs.
Partnership Firm Registration Packages
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Here are some of the features to expect from our Partnership Firm Registration packages.
Frequently Asked Questions (FAQs)
You can find some of our most frequently asked questions below;
An unincorporated business structure that two or more parties form and own together is called a partnership. These parties, called partners, may be individuals, corporations, other partnerships, or other legal entities.
Partners may contribute capital, labor, skills, and experience to the business. They may have unlimited legal liability for the actions of the partnership and its partners.
The most common type of partner is a general partner, who actively manages and exercises control over the business operations.
Limited partners have limited legal liability. This type of partner cannot manage or exercise control over the business.
Among the most common types of partnerships are general partnerships (GP), limited partnerships (LP), and limited liability partnerships (LLP).
A partnership can even start without an oral or written contract. Where there is a written contract between the partners, it is called a partnership agreement. The partners agree on the purpose of the partnership and their rights and responsibilities.
A partnership agreement is a mutual deal between all partners which decides the rights and duties of partners. In some firms, a partner can also modify the agreement if he wishes.
It usually takes 3-14 business days for the Partnership Registration in Nigeria.
Name Search: 6 - 24 hours from submission.
Grant of Certificate of Registration: 2 - 10 Days from filing.
Total time: Approximately 3 - 14 days.
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